I have no problem converting your sample from RNG to RNC [1].
My guess is that you hit another issue with the command line usage. If you do not specify the input and output types with the -I and -O command line options then Trang will guess from the extension (as documente on http://www.thaiopensource.com/relaxng/trang-manual.html#arguments) and for .xml it will infer XML input while what you want is RNG input. Either use docWithoutIncludes.rng instead of docWithoutIncludes.xml for the RNG schema or specify -I rng in the command line.

I'm interested to take a rnc file which includes others,, say
"docWithIncludes.rnc" and flatten it so to speak so that all included
content is merged and thus there is only rnc file docWithoutIncludesn.rnc.

The docWithIncludes.rnc has a list of choices such as

include "extensions.rnc" {
metaref.attribute = attribute metaref {

"AAA" |
"BBB" |
"CCC" |

the first step taken was to take docWithIncludes.rnc and convert it to
xml with jing as follows

jing -s -c docWithIncludes.rnc > docWithoutIncludes.xml

This creates a large XML with 79K lines and preserves the choices for
example